Ruffled Feathers: Green Energy Act Irks Toronto Real Estate Market
May 4th, 2009 Categories: Home Buyers, Home Sellers, News Wire
Perhaps because of last week’s Earth Day celebrations, or the fact that I’ve seen the trailer for Earth (the first film in the Disneynature series) so many times that, well, I now think I HAVE to see the movie, or my Green Monster Award and subsequent nod from Political Calculations On the Moneyed Midways, that I seem to have … Green On My Mind.
So much so that it guilts me to write a little something about the provision for mandatory home efficiency disclosure (read: home energy audits) as proposed in the current version of Bill 150, Green Energy Act. Click here for a pdf version.
Note: As of the date of this article, Bill 150 has been ordered for Third Reading.
Green Energy Act Proposes
Mandatory Home Energy Audits
As originally written, the provincial government proposed that home energy audits be mandatory in Ontario housing transactions. Read: in order to sell your Toronto house you would have to provide, at your own cost, a home energy audit report to the potential buyer.
Understandably, that proposal didn’t sit well with Toronto home sellers and, of course, Toronto real estate agents. Ruffled some feathers, it did! A few concerns:
- yet another cost to be borne by home sellers
- timing of the requirement, given tough economic times
- lack of program specifics such as approved service providers, regulation of auditors, information to be provided, acceptable reporting methodologies, cost, audit exceptions, and so on
- perceived use of these reports by Toronto home buyers
- possible impact on real estate negotiations.
Concerns were voiced by OREA, TREB and the public, and Bill 150 has been amended to allow home buyers to opt out. It’s been called a significant change, but I’m not so sure about that.
Here’s why.
Toronto Home Seller
Opt In A Better Solution?
Although amended, the legal burden still rests with the Toronto home seller to provide the energy audit report.
It’s difficult to sell this initiative to me when it’s targeted to a teeny, tiny percentage of Toronto homes at the time of sale (a little opportunistic, non?), leaving the majority of homes and their owners outside the scope of such a program. And the fact that the outcome is a report (think of the trees!), with no legal requirement to make any improvements or modifications based on findings makes me question the actual benefit.
Toronto home sellers are not mandated by law to provide a home inspection report (the pre-list inspection report), nor a Seller Property Information Statement (SPIS). However, many home sellers will happily provide this documentation as they believe it’s a useful tool in marketing their properties and a way to eliminate “surprises” during the negotiating and conditional phases of a sale.
So why make it mandatory to provide an energy audit report, unless the buyer opts out? Why not make it compelling for home sellers to actually make energy efficient upgrades to their homes, and to include this report in their marketing strategy, through the continued super-hyped use of generous green energy incentives, grants, rebates, etc?
Initiate, Don’t Mandate!!
And don’t forget, if the mandated energy audit report is dropped from Bill 150 (one can hope!) and you are a home buyer who wants this type of information, you can always negotiate that as a condition of sale.
Happy (Belated) Earth Day!!
Toronto buyers and sellers! Are you looking for a Toronto real estate agent who’s in tune with today’s challenging market? Call Lauren at 416–550–6991, or send me an email.
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